Tips on Reducing Your Homeowners Insurance!!

Blogging From The Desk of Alicia Lagarde-Craig

With consistent increases to our insurance premiums, we are always looking for ways to reduce the impact to our wallets.

Many insurance carriers offer credits for wind mitigation.

Recently, a client was able to save $1500.00 on a LA Citizens Fair Plan Policy. Keep in mind the credits may not always be this high depending on what credits are applicable.

It is recommended that you acquire this wind mitigation form for a newly built home or a fully renovated home as they SHOULD be built to code.

Each Insurance Company has their own wind mitigation form and it must be completed by a qualified professional.

If a wind mitigation form cannot be completed, some insurance companies are providing credits for having a “Hip” Roof. Description attached. (See 'Hip VS. Gable Roof, What's The Difference')

The cost is between $95.00-$175.00 to have the wind mitigation form completed. Keep in mind there is no way to guarantee any credits until a wind mitigation form is complete.

Most of the affluent insurance carriers will allow their form to be completed by a licensed residential contractor or licensed engineer.


Hip VS. Gable Roof, What's the Difference

A gable is the triangular portion of a wall between the edges of a sloping roof. The shape of the gable and how it is detailed depends on the structural system being used (which is often related to climate and availability of materials) and aesthetic concerns. Thus the type of roof enclosing the volume dictates the shape of the gable.





A hip roof, or hipped roof, is a type of roof where all sides slope downwards to the walls, usually with a fairly gentle slope. Thus it is a house with no gable or other vertical sides to the roof. A square hip roof is shaped like a pyramid.





RESIDENTIAL PROPERTY STORM MITIGATION INCENTIVES:
The first mandatory statewide building code, the Louisiana State Uniform Construction Code, was passed during the 2005 First Extraordinary Legislative Session, immediately following Hurricanes Katrina and Rita. Act 335 of the 2007 Regular Session of the Louisiana Legislature provides resources for training and enforcement of the code. The Legislature sought to encourage implementation of the code by providing incentives to home owners who are willing to strengthen their homes against storms and hurricanes.

Mitigation Incentives Include:

*Insurance premium discounts when a homeowner builds or retrofits a structure to comply with the Louisiana State Uniform Construction Code, or installs mitigation improvements demonstrated to reduce the amount of loss from a windstorm or hurricane.

*Tax deductions for voluntarily retrofiting an existing residential structure to bring it into compliance with the new building code.

*Exclusions from local sales and use tax when purchasing storm shutter devices for hurricane protection.


WIND MITIGATION INSURANCE PREMIUM DISCOUNT INFORMATION:

Act 323 of the 2007 Regular Session provides insurance premium discounts for insureds after insurers file rates with the Louisiana Department of Insurance between March 31, 2008 and January 1, 2009. This rate filing will include the new premium discounts when:
* an owner builds or retrofits a structure to comply with the requirements of the State Uniform Construction Code, and/or
* an owner installs damage mitigation improvements or retrofits their property utilizing construction techniques demonstrated to reduce the amount of loss from a windstorm or hurricane.

Premium discounts apply to one or two-family owner occupied homes and modular homes. They do not apply to commercial or commercial residential properties with three or more units, or to manufactured or mobile homes. Discounts are granted based on damage litigation improvements and construction techniques listed on the Louisiana Hurricane Loss Mitigation Form. Contact your insurance company or agent for more information.

These damage mitigation improvements and /or construction techniques include, but are not limited to:

* building design
* roof bracing
* secondary water barriers
* opening protection
* roof-to-wall strength
* roof deck attachment
* roof covering and roof covering performance
* wall-to-floor-to-foundation strength
* window, door and skylight strength
* other mitigation improvements and/or construction techniques that the insurer may determine to reduce the risk of loss due to wind.

Inspection and certification must be performed by a building code enforcement officer, registered architect or engineer, or a registered third-party provider authorized by the Louisiana State Uniform Construction Code Council to perform building inspections. For a list of registered third party providers, visit www.dps.louisiana.gov/lsuccc or call (225) 922-0817.

Proof of eligibility for premium discounts must be provided by the insured. The insurer may require completion of the Louisiana Hurricane Loss Mitigation Form or other documentation to demonstrate compliance with the State Uniform Construction Code, such as permits, certificates of occupancy, inspection reports or receipts. If deemed necessary, the insurer may also perform its own
independent inspection.


TAX DECUCTIONS
Act 467 of the 2007 Regular Session allows tax deductions for insureds who voluntarily retrofit an existing residential structure to bring it into compliance with the State Uniform Construction Code. This construction code retrofitting deduction is an amount equal to 50 percent of the cost paid or incurred for the retrofit on or after January 1, 2007, less the value of any other state,
municipal or federally-sponsored financial incentives for the cost paid. The taxpayer must claim the homestead exemption for the home being retrofitted and the home cannot be rental property.

The tax credit can be no more than $5,000 per retrofitted residential structure and is claimed on the tax return for the year in which the work is completed. Proof that the retrofit complies with the State Uniform Construction Code, documentation of the cost of the project, and assurance that the project was voluntary as defined by the law, must be submitted with the state tax return. This became effective in the 2007 tax year.

Money Saving Tips for Heating Your Home During the Winter

Blogging From The Desk of Alicia Lagarde-Craig

Money-Saving Tips for Heating Your Home

Space heating accounts for more than 40 percent of annual energy use in a typical home, according to the U.S. Department of Energy. By taking action before and during the heating season, you can reduce your heating costs and make your home more comfortable during those cold winter months.

Get your home ready for winter

•Have a qualified technician inspect and clean your heating system before the start of cold weather to ensure your system is running efficiently.

•Inspect the ductwork in exposed areas such as the basement or attic, and repair any leaks or disconnections.

•Caulk and weatherstrip doors and windows to prevent heat loss.

•Make sure your home is insulated to levels recommended for your climate zone.

•Seal gaps and air leaks in your chimney, plumbing access and other often-overlooked areas of the home. For more information, see Hidden Sources of Home Heat Loss.

•If your heating system is more than 15 years old, consider replacing it with a newer, more efficient unit. If you install a new system, make sure it is ENERGY STAR qualified. ENERGY STAR, which is a joint program of the U.S. Department of Energy and the Environmental Protection Agency, tests and certifies products for energy efficient performance.

Saving energy during the heating season

•Change the air filter on your furnace once per month during the heating season. A dirty filter restricts air flow and causes the system to run less efficiently.

•Save energy by setting your thermostat at the lowest comfortable temperature. Optimize savings by lowering your thermostat setting when you are sleeping or away from home. Afraid you might forget? A programmable thermostat can make the adjustments for you.

•Reverse the airflow direction of ceiling fans, forcing warm air to bounce off the ceiling down into the living space where you need it.

•Open window treatments on south- and east-facing walls during the day to let in warming sunshine. At night, close them to keep cold air out and maintain the heat inside your home.

For Market Information in your Neck Of The Woods, visit: http://www.mynolahomes.com/mimarket

If you or anybody you know needs assistance with real estate, please call me at (504)382-3724. Thanks, Alicia

Five Great Things about Homeownership

Blogging From The Desk of Alicia Lagarde Craig

If you've been on the fence about homeownership, now is the time to take a leap! Don't let the negative press deter you from one of life's greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity: When you pay rent, you never see that money again. It is lining the landlord's pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today's market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you'll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you "own" your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It's a great time to buy. Interest rates are at historic lows. We're talking 3.25 percent instead of 6.0 or higher. This means BIG savings for today's buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership is a real joy. It's time to get off the fence and into a home that is right for you!

For Market Information in your Neck Of The Woods, visit: http://www.mynolahomes.com/mimarket

If you or anybody you know needs assistance with real estate, please call me at (504)382-3724. Thanks, Alicia

Top Ten Things You Need to Know About the 3.8% Tax

Blogging From The Desk of Alicia Lagarde-Craig

1) When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will NOT be subject to this tax.

2) The 3.8% tax will NEVER be collected as a transfer tax on real estate of any type, so you'll NEVER pay this tax at the time that you purchase a home or other investment property.

3) You'll NEVER pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year's gross income.

4) If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return) / $500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will NOT pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

5) The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividends income and net rents (i.e. rents after expenses).

6) The tax goes into effect in 2013. If you have investment income in 2013, you won't pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.

7) In any particular year, if you have NO income from capital gains, rents, interest or dividends, you'll NEVER pay this tax, even if you have millions of dollars of other types of income.

8) The formula that determines the amount of 3.8% tax due will ALWAYS protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would NEVER be imposed on more than $1000.

9) It is true that investment income from rents on an investment property could be subject to the 3.8% tax. BUT: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

10) The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. The National Association of Realtors strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

Please refer all questions to Alicia Lagarde Craig via email at AliciaLagarde@kw.com

The 11 Commandments When Buying A Home

Blogging From The Desk of Alicia Lagarde-Craig

THE ELEVEN COMMANDMENTS - When Buying A Home


1. Thou shalt NOT change jobs, become self-employed or quit your job.

2. Thou shalt NOT buy a car, truck or van – or you may be living in it!

3. Thou shalt NOT use charge cards excessively or let your account fall behind.

4. Thou shalt NOT spend money you have set aside for the closing.

5. Thou shalt NOT omit debts or liabilities from your loan application.

6. Thou shalt NOT buy furniture, appliances or any home furnishings for your new home before the closing.

7. Thou shalt NOT originate any inquiries into your credit except those made by your mortgage lender

8. Thou shalt NOT make large deposits into your banking account without first checking with your lender.

9. Thou shalt NOT change bank accounts.

10. Thou shalt NOT co-sign a loan for anyone.

11. Thou shalt keep making mortgage or rent payments timely.

Flood Insurance Facts 2012

Blogging From The Desk of Alicia Lagarde-Craig

FLOOD FACTS

-Floods and flash floods happen in all 50 states.

-Everyone lives in a flood zone.

-Most homeowners insurance does not cover flood damage.

-If you live in a Special Flood Hazard Area (SFHA) or high-risk area and have a Federally backed mortgage, your mortgage lender requires you to have flood insurance. (To find your flood risk, fill out the Flood Risk Profile.)

-Just an inch of water can cause costly damage to your property.

-Flash floods often bring walls of water 10 to 20 feet high.

-A car can easily be carried away by just two feet of floodwater.

-Hurricanes, winter storms and snowmelt are common (but often overlooked) causes of flooding.

-New land development can increase flood risk, especially if the construction changes natural runoff paths.

-Federal disaster assistance is usually a loan that must be paid back with interest.

-If you live in a moderate-to-low risk area and are eligible for the Preferred Risk Policy, your flood insurance premium may be as low as $129 a year, including coverage for your property's contents.

-You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program.

-It takes 30 days after purchase for a policy to take effect, so it's important to buy insurance before the floodwaters start to rise.

-In a high-risk area, a home is more than twice as likely to be damaged by flood than by fire.

-Anyone can be financially vulnerable to floods. People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding.

-The average annual U.S. flood losses in the past 10 years (2001-2010) were more than $2.7 billion.

-When your community participates in the Community Rating System (CRS), you can qualify for an insurance premium discount of up to 45%.

-Since 1978, the NFIP has paid over $36.9 billion for flood insurance claims and related costs (as of 12/31/10).

-Over 5.5 million people currently hold flood insurance policies in more than 21,000 communities across the U.S.


Increased Cost of Compliance (ICC) - Coverage for expenses a property owner must incur, above and beyond the cost to repair the physical damage the structure actually sustained from a flooding event, to comply with mitigation requirements of state or local floodplain management ordinances or laws. Acceptable mitigation measures are elevation, flood-proofing, relocation, demolition, or any combination thereof.

5 Facts for Buyers Who Want to Submit Lowball Offers

A housing transaction, at the most fundamental level, includes one person who wants to sell and one person who wants to buy. Once the terms are agreed upon, voilà! . . . You have a win-win situation.

However, if the seller is miserable with the final terms or feels like they had to settle for a lowball offer; the deal is likely to unravel or turn ugly. And if it does fall through, that causes aggravation and costs valuable time and money for everyone involved.

Here are five facts that a buyer can use to prevent submitting lowball offers:

1. Market temperature matters.
The temperature of the market affects everything, from how buyers shop to what the “right price” is for a home.

One way to do this is to show the percentage difference between the actual list and sale prices for the properties in your neighborhood. It speaks volumes about the current market’s activity. Comparing list vs. sale prices also provides a strong indicator of which direction the market is moving and how much less or maybe even more, than the asking price a buyer should offer.

2. Apples are apples.
When analyzing the comps, make sure the buyers see an apples-to-apples match to their home candidate. Any similarities or differences should be explained to help the buyers see how to analyze the characteristics in the prospective homes. Putting the potential new property head-to-head with the other properties on the market today or those that have sold within 60 days can help buyers understand how key details like square footage, amenities, lot size, age, condition, and others can affect the price.

3. Time is money.
Data from the National Association of Realtors® shows that the typical home search takes 12 weeks. If a buyer starts to lean toward lowballing when it’s offer time, it is critical to point out important time facts like how long inventory lasts and how many hours, days, and weeks you both have invested in finding the right property. Saving time can be a serious motivator for buyers, especially those who have endured a long three months of hunting.

4. Sellers are people too.
If the sellers purchased their house between 2005 and 2009, chances are that property has lost value. They are not happy about it and, whatever their reasons for selling, they are already very frustrated at having to sell at a loss. The sellers are already losing money and will push very hard not to lose any more. Selling your home is an emotional decision all on its own, in addition to factoring in that the property is being sold at a loss.

As a buyer’s agent, it is important to remind the buyers that when people sell their property, they are selling a piece of themselves. A house is the setting of someone’s life. For the seller, its value includes what it represents, not just what it lists for. So while submitting a lowball price sounds like a great way to get a cheap deal, it can start the negotiation process on the wrong foot. A seller and a good seller’s agent will not take that offer seriously. In fact, even if they do respond, that seller now does not want to sell the home to that particular buyer and will do almost anything to encourage another buyer to step up.

5. The wrong offer can cause buyers to miss out.
When I started buying property, I came across a little 1950s Creole Cottage that was about to go on the market at $40,000. It was a fixer-upper and, at that price, it was a very good deal. Although I would have been willing to pay the asking price or close to it, I wanted to see if I could lowball and get it for less. Against my better judgement, I offered $20,000. I thought they would come back with a counter and that we would ultimately close the deal at $35,000. Well, they did counter, but with another potential buyer whose initial offer was $30,000. They were so offended by my low offer that they initially refused to sell it to me at any price. With a little begging and pleading, I was able to acquire the property at an acceptable price by all parties involved.

Most buyers today are smart. With the right data and encouragement from their real estate agent, they will normally agree to submit a reasonable initial offer.

For more information on this blog or any real estate question or need. Contact Alicia Lagarde @ AliciaLagarde@myNOLAhome.com or visit www.myNOLAhome.com